The increase in performance was in line with expectations. The company released its annual report. In 2017, it achieved operating income of 564 million yuan, an increase of 8.29% over the previous year, and achieved net profit attributable to shareholders of listed companies of 33.2079 million yuan, an increase of 10.66% over the previous year. Net cash flow from operating activities was 8.21 million yuan, a sharp increase of 112.88% over the previous year. Daily operations were steady, and performance growth was in line with expectations.
Leading figures in the cloud computing industry joined, and traceability of the cloud's leading position became prominent. The company's card is the Ministry of Commerce's meat and vegetable distribution traceability platform, TaoCai Cat+Easy Batch Plus TraceCloud to create an efficient food safety supply chain ecosystem: Taocai Cat starts with the vegetable market to achieve accurate “last mile” traceability of agricultural products; Easy Batch Fresh promotes online electronic settlement of the wholesale process, opening up the traceability information chain from farming to retail; the traceability cloud combines the company's local traceability systems to open up the entire data chain for production base harvesting, retail store storage and end users. According to the company announcement, out of a total of 58 pilot cities that have already been tendered in five batches of distribution traceability across the country, the company has won 24 bids, with a market share of over 40%, ranking first in the country. On April 12, the company issued an announcement to appoint Huang Haiqing, the former vice president of Tencent Cloud, as the company's president, to take full responsibility for the company's business and actively promote the company's “cloud computing+big data” strategy development.
The archives and administration of justice have progressed steadily, and both wings have helped take off. In the field of archival informatization, the company occupies an advantageous position in the traditional archival business. In 2017, the market share in archives bureaus above the sub-provincial level reached 70.59%. At the same time, the company actively transitioned to full-life cycle management such as business consulting, data services, file hosting and utilization of file resources, developing a hosting cloud and establishing a file cloud platform.
In the field of political and legal informatization, the company focuses on judicial prisons. The “518 Platform Project” of the Jiangsu Prison Administration has become a national benchmark. It has been deployed and promoted nationwide. The market coverage of Shanghai and Jiangsu reached 100%, and won two new bids in the Xinjiang region, such as the “Xinjiang Yuhe Prison Information Technology Construction Project”, with a total amount of 83.02 million yuan. Records and administration of justice are progressing steadily, and food traceability has been added one arrow and two more wings, leaving nothing to be desired.
Investment advice: Senior experts in the cloud computing industry joined the company. Under the new retail trend, the company's card advantages are outstanding, the food traceability process is comprehensive, the “sharp arrow” of traceability of the cloud, and the “two wings” of the archival industry and the judicial industry, future performance growth can be expected. We expect the company's EPS to be 0.61 yuan, 0.76 yuan, and 0.95 yuan respectively in 2018-2020, maintaining the “Buy-A” investment rating, with a target price of 60 yuan for 6 months.
Risk warning: The development of the traceability cloud did not meet expectations, and the new retail business promoted risks.